Backstory
Hi my name is Steven Natera. I'm a software engineer. I am from NYC, the land of unaffordable homes. Here is my story on how I landed my first property.
In 2015, I decided I would switch careers to become a software engineer. After 2 years of obstacles, I landed my first software engineer job in May of 2017. Since I’m from NYC, I lived at home with my mom. I wanted to save enough money to rent my own place in the city.
For awhile I listened to music on the 40 min morning commute to my job in SoHo. Then one day, a friend shared with me a biggerpockets podcast episode. I listened to that one, then another, and another, until I was consumed with the concept of financial freedom through house hacking. I decided I would do everything in my power to house hack my first property.
In June of 2017, I started to save for my first house hack in NYC. I managed to save towards an emergency fund, a 401k, an investment account, and a downpayment of $11,000, over 2 years.
When I started my house search I got pre-approved for $550,000. I was amazed that I qualified for such an amount. But I was disappointed to find out that most multi-family homes were at a minimum $650k. And on top of that there were located far away from the city which meant I would need to add an extra hour to my commute. The more affordable options were Coops which are more like buying shares in a building. MY understand was they do not grant you real property rights like traditional real estate assets (condos, SFH, etc).
After these realizations I decided that if I wanted to own a real property, within my budget, I would need to leave NYC, and move to another state. I spent the next few months saving and researching where I wanted to move to and I landed on Austin, TX. I made my choice based on tech industry job prospects, and suggestions from friends that it was a great city. Little did I know Austin is one of the fastest growing cities in America with strong appreciation over the last 10 years. When I moved here I rented with the intention to save for another year to buy a home after my lease was up. (I saved even more money because TX has no income tax!)
I started looking for a home in Dec 2020. I wanted a home in 78704 zip code but stopped searching there as its one of the hottest areas in Austin. Home prices where similar to what you find in NYC. I expanded my search to the broader Austin area. My search lasted about 9 weeks. Throughout that time I experienced what it means to be in a hot market. Homes would go off market in 5-8 days. New homes would have list price offers within 24 hrs of being listed. I did not let that deter me. I continued to visit homes, and make offers until I found the current deal.
In a community south of McKinney Falls State Park in the 78747 area, I found the perfect house hack home. The property was a 5 bedroom, 3.5 bath, 3031 sqft home. The home was on the market for 40 days and overpriced at $349k. I made an offer of $285k on the property based on comps and was told to kick rocks in the rudest way. Though I was upset, I started to play the long game over the next 2 weeks. While I looked at other properties I continued to negotiate with the realtor of my preferred home. After extensive back and forth, they agreed to sell for $337k but if the house did not appraise, they would need to lower the price or we would back away from the deal. Well the home did not appraise and I ended up closing on the home in April 2020 at $325k (during the peak of COVID-19 pandemic). In my eyes it was a victory, and the start of my first house hack.
That pretty much sums up my story. Below you'll find my methods for deal analysis, the numbers related to my deal, and my next steps. Finally, I want to give a special shoutout to Diego Corzo who I reached out to after I heard his episode. It's been an amazing experience working with you Diego. You are the best real estate agent I could've asked for; none of the above would've been possible if you hadn't connected with me and taught me a bunch throughout the process. Thank you!
Analysis Methods
Used a bunch of tools to find my current property.
Searching
- Redfin
- Realtor MLS
Analysis
- My personal excel spreadsheet
- TheDealDelta.com, an app I made based on my excel spreadsheet. You can view the financial breakdown of my deal in this report. Click submit to view the results.
Deal Details
- 5 bedrooms. 3.5 bathrooms
- 3031 sqft
- Purchase: $325,000
- Interest rate: 3%
- Down payment: 5%
- Conventional loan + owner occupied
- Monthly mortgage: $2098.31
- Cash to close: $18,289.56
What's next?
I plan to enjoy the fruits for my 3 year long journey for a few weeks. I going to live in the master bedroom downstairs. Once the home is furnished, I'll house hack and rent 2 bedrooms upstairs. I figure I could get the rooms rented for about $700 since the rooms are huge (14'x16') and the home is more updated. After year 1, I'll either keep it rented by the room or rent out the entire home to a family.
Hope this was helpful.
